Investing.com – With a staggering loss of more than 18% over 24 hours, the cryptocurrency is by far the biggest drop in the top 20, in the face of a widespread rout in the cryptocurrency market.
Solana, which is the 11th largest cryptocurrency by market capitalization, indeed finds itself at the forefront of the affair that is rocking the cryptocurrency market at the start of the week, concerning the FTX exchange of Sam Bankman-Fried and his trading company, Alameda Research.
The Solana suffers from fears surrounding FTX
Remember that fears about the solvency of the FTX platform sent its FTX Token into a very sharp fall. However, the trading company Alameda is very exposed to this cryptocurrency, which also poses problems of conflict of interest knowing that Alameda and FTX are managed by the same person.
But Alameda is also heavily exposed to Solana. According to a copy of Alameda’s balance sheet obtained by CoinDesk, the company holds $292 million in “unlocked SOL”, $863 million in “locked SOL”, and $41 million in “collateral SOL”. The fear of the market is therefore that Alameda could decide, or be forced, to dump its SOL tokens in order to obtain new liquidity.
Early Monday, Bankman-Fried tried to reassure FTX users, tweeting, “Competitor is trying to come after us with false rumors. FTX is fine. Assets are fine.” This, however, was not enough to reassure, as the FTX Token plunged 27% in 3 hours last night, with, as we have seen, clear consequences for the Solana as well.
SOL loses 35% in less than 2 days
Remember also that the current uptrend of Solana started before the Alameda-FTX affair.
The Solana indeed started its fall on Sunday afternoon, after peaking at $38.75. Thus, on this morning’s low at $25.14, SOL was showing a 35% plunge in less than 2 days.
The cryptocurrency had indeed benefited last Friday and Saturday from the announcement of a collaboration with Google Cloud, the cloud computing services division of Alphabet (NASDAQ:), before suffering from profit taking on Sunday and Monday, then to greatly accentuate its fall since yesterday evening with fears of massive sales of SOL by Alameda.
Technical thresholds to take into account on the Solana
From a graphical point of view, it should be noted that the fall of the Solana since last night has completed the cancellation of the bullish bias of the previous days, bringing the cryptocurrency below the trend line which accompanied the rebound movement initiated on October 21, as seen in the H4 graph below:
Now, the psychological threshold of $25 is the next support to consider. On the upside, the $30 zone will be the first resistance to take into account on the Solana.